This paper summarizes “The Center and the Periphery: The Globalization of Financial Shocks," which presents a new approach to measure and understand systemic financial turbulences. We defined two measures of systemic disturbances: weak- and strong-form globalization and created the...

Over the past two hundred years -- some would argue even longer -- financial events, such as the devaluation of a currency or an announcement of default, have been capable of triggering an immediate adverse chain reaction among countries within a region and in some cases across regions. The...

This study analyzes and provides empirical tests of early warning indicators of banking and currency crises in emerging economies. The aim is to identify key empirical regularities in the run-up to banking and currency crises that would enable officials and private market participants to...

Since the Tequila crisis of 1994-95, the Asian flu of 1997, and the Russian virus of 1998, economists have been busy producing research on the subject of contagion. Yet, few studies have examined empirically through which channels the disturbances are transmitted if there are, indeed,...

The authors' earlier work on financial crises suggested that economies behave differently on the eve of crises (see Kaminsky and Reinhart, 1996). Typically, financial crises occur as an economy enters a recession that follows a prolonged boom in economic activity fueled by credit creation and...

In the wake of the Mexican and Asian currency turmoil, the subject of financial crises has come to the forefront of academic and policy discussions. This paper analyzes the links between banking and currency crises. We find that: problems in the banking sector typically precede a currency...

In this paper, we examine which markets are most synchronized internationally and exhibit the greater extent of comovement. We focus on daily data for four asset markets: bonds, equities, foreign exchange, and domestic money market. Our sample covers thirty-five developed and emerging market...

In this paper, we analyze the extent to which past financial crises share common characteristics in Latin America, Asia, Europe, and the Middle East. We examine the recent crises in Asia and in Latin America, in particular their severity, to assess whether the considerable historical differences...

Over the last 20 years, some financial events, such as devaluations or defaults, have triggered an immediate adverse chain reaction in other countries -- which we call fast and furious contagion. Yet, on other occasions, similar events have failed to trigger any immediate international reaction....

Based on a sample of 104 countries, we document four key stylized facts regarding the interaction between capital flows, fiscal policy, and monetary policy. First, net capital inflows are procyclical (i.e., external borrowing increases in good times and falls in bad times) in most OECD and...